Strategic Incentives for Adopting the Global Minimum Tax

46 Pages Posted: 22 Jul 2022 Last revised: 12 Feb 2024

See all articles by Wei Cui

Wei Cui

University of British Columbia (UBC), Faculty of Law

Date Written: February 10, 2024


The United States, along with Canada and a majority of nations in the world, currently faces an important policy choice: should it adopt the global minimum tax, proposed by the Organization for Economic Cooperation and Development (OECD) and designed to subject large multinationals to no lower than a minimum of corporate income taxation wherever they operate? For all nations pondering the choice, what other nations will do is an essential consideration. On the one hand, the global minimum tax—also known as “Pillar Two”—has generated extensive controversy and opposition. On the other hand, over 20 countries have implemented the tax according to the OECD’s model rules. According to a popular narrative, this may already amount to a “critical mass” of countries that makes global Pillar Two adoption inevitable.

This Article sets out a novel conceptual framework for predicting and interpreting the course of Pillar Two’s global adoption. It analyzes self-interested incentives for adopting Pillar Two on the part of governments aiming to maximize national income. The analysis demonstrates that there is nothing inevitable about Pillar Two adoption. Countries from which multinationals originate will likely suffer deep losses, and most will be better off pulling out of Pillar Two. Pillar Two’s enforcement mechanisms lack effectiveness; accounts of their purported clever design are plagued by logical inconsistencies. Whatever sense of novelty in institutional design Pillar Two introduces, it is sustained only by a refusal to consider fundamental normative questions about consistency with international law.

Keywords: Global minimum tax, international taxation, OECD BEPS, Pillar Two, UTPR

JEL Classification: F23, F55, H25, H73, H87, K34

Suggested Citation

Cui, Wei, Strategic Incentives for Adopting the Global Minimum Tax (February 10, 2024). Available at SSRN: or

Wei Cui (Contact Author)

University of British Columbia (UBC), Faculty of Law ( email )

1822 East Mall
Vancouver, BC V6T1Z1


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